On Jan. 23, as flames spread through his Inner Mission home, Gibbs Chapman escaped down a ladder and into an adjacent building with his girlfriend, 6-month-old son and two dogs.

It was harrowing, but it was a lot easier getting out than it may be to get back in.

Six months after the predawn fire swept through the well-known but illegal artists building at 1441-1451 Stevenson St., the building's 22 residents are fighting to persuade the property owner and the city to perform the building and safety improvements that would make it a legal place of residence. For now, the site is empty and the residents have scattered.

It won't happen, says the building owner, who contends the process of converting the structure to legal housing not only would cost millions of dollars but require a conditional use permit because the area is not zoned residential. It is zoned for light industrial uses.

"We have no interest in developing the property as residential, and the building in its current state is not appropriate for residential in any way," said attorney Jeff Woo of Cooper White Cooper, who is representing the owner, Joshua Albert.

The case highlights how the real estate boom is putting pressure on all sorts of land uses in the city, including the improvised live-work spaces of dubious legality that have long attracted artists.

During down markets, many landlords are happy to have artists fill their empty buildings, but during booms like the current one, property owners have a financial incentive to replace them with tech firms or build new housing structures, said Joe Tobener, an attorney for some of the residents.

"Our artists are leaving the city and the Bay Area in droves," Tobener said. "We cannot afford to lose another building to tech office space. ... I was a tenant rights attorney during the first dot-com boom. This boom is different. The artists, teachers and musicians are not just moving down the street, they are leaving altogether."

City aware of residents

The building is the second illegal artist residence that has surfaced in the neighborhood in recent months. At 1049 Market St., the city was able to make a deal allowing about 100 artists to remain in a structure that was initially declared illegal for residential use. But the 1049 Market building had far fewer code issues than the property on Stevenson Street, according to Jeff Buckley, Mayor Ed Lee's senior adviser on housing, who is working with the Stevenson Street residents.

"What makes this challenging is it's an unknown world," Buckley said. "We try our best to preserve the residential use whenever possible, but this one seems very challenged."

The building has housed artists illegally since the 1970s, when it was owned by Hal Jones, a motorcycle racer, now deceased, who distributed bike parts from the building.

While it was never officially converted to residential use, it's clear some city departments knew the building was occupied. The San Francisco Housing Authority inspected the property and approved one unit for a Section 8 voucher in the 1990s. The San Francisco Rent Board ruled on several rent disputes at the property.

Longtime resident Patricia LaCavagave birth to son Nathaniel Galipeau in the building, raised him there, and sent him to local public schools, using the Stevenson address as a place of residence.

"It's hella depressing," said Galipeau, now 25. "I grew up with a bunch of artists. We used to have block parties and water fights in the alley. I am trying to go to school right now, and I have a minimum wage job. I don't make enough to find my own spot out here. I was relying on that spot to be able to afford school."

Tenants did repairs

The fire broke out in a long-vacant garage space in the building that the owner had leased to DJs. Spontaneous combustion in a bucket of an oil-based floor finish is suspected as the source of the fire. After the blaze, the city's Department of Building Inspection filed two complaints: The first noted "possible illegal change of use from commercial to residential." The second outlined extensive plumbing, electrical and mechanical work that had been done without permits.

Chapman said the unwritten agreement with the property owners was that tenants would maintain the building in exchange for being left alone. It has housed printmakers, painters, furniture makers, fashion designers, art teachers, muralists and others. Tenants built their own bathrooms and kitchens, replaced access stairs and installed floors. Rents ranged from just under $1,000 to $2,700 a month.

"We basically did all the work, and that was the way we wanted it," Chapman said.

Competing interests

Even as the Mission District started to become trendy, the 1400 block of Stevenson Street had been off developers' radar. The narrow lane has long been a place where homeless people spilled over from the nearby freeway underpass. Shopping carts and trash bags are often left behind.

But with new housing springing up in all directions, the block has caught developers' attention.

Tobener said he has received a call from an attorney representing a group in contract to buy the building at 1441-1451 Stevenson St. Woo would not comment on whether the building is in contract to be sold.

Two weeks ago, Axis Development submitted a preliminary plan to build 69 condominium units at 1463 Stevenson St., a parking lot that abuts the property. The development would also include a separate 14,000-square-foot building along 14th Street for PDR (production, design and repair) and "small enterprise workshop" space.

Woo said that development is unrelated to the 1441 Stevenson St. building, but he acknowledged that property would be an attractive development site for housing.

"The city is going to have to come to grips with these competing interests," he said. "There is always going to be a loser when the city has to choose one use over another."

Seeking affordable housing

While the building may have a buyer, Tobener is working with the San Francisco Community Land Trust to strike a deal as well. The trust is interested in renovating the structure and setting it up as permanently affordable housing for artists, according to Richard Hurlburt, the group's attorney.

"If the owner will sell we would like to have continued live-work housing there, managed by the residents," Hurlburt said. "It would be permanently affordable live-work space."

LaCava, who volunteers extensively with Mission arts groups, said she hopes to return. "I personally would love to go back there. I raised my son there. He lived there all his life. But I realize that there is a good chance that the powers that be will make sure we will never go back so somebody can make a few million. I don't think I will be able to stay in San Francisco."